Business
Don’t Be So Picky About a Job, China’s College Graduates Are Told
At this year’s commencement ceremony for the Chongqing Metropolitan College of Science and Technology in southwestern China, the graduating class did not receive the usual lofty message to pursue their dreams. Instead, they were dealt a harsh dose of reality.
“You must not aim too high or be picky about work,” said Huang Zongming, the college’s president, to more than 9,000 graduates in June. “The opportunities are fleeting.”
A record number of Chinese college graduates are entering the job market, exacerbating an already bleak employment outlook for the country’s young people. The confluence is deepening one of the most intractable issues keeping the world’s second-largest economy from regaining its vibrancy.
China’s unemployment rate for 16- to 24-year-olds in urban areas hit a record 21.3 percent in June. The numbers for July are expected to be even higher as the next wave of graduates officially transitions from students to job seekers.
Government policymakers struggling to address the problem are now leaning on colleges to do more to find jobs for graduates. The job performance of school administrators was already tied to the percentage of their students who find employment after graduation. Now top school officials are being encouraged to visit companies to unearth opportunities. In some cases, the scrutiny is so intense that students resort to fabricating job offers to placate school officials.
Over the last three decades, as China’s economy grew by leaps and bounds, more people attended college, seeing it as a pathway to promising careers. The number of students enrolling in colleges and universities increased to 10.1 million in 2022 from 754,000 in 1992, according to the National Bureau of Statistics.
This year’s estimated graduating class of 11.6 million students is expected to be the largest ever, and future classes are expected to be even bigger. At the same time, the economy is not growing like it once did.
The problem of youth unemployment may not abate for a decade, carrying potentially bigger ramifications for the country’s leadership, said a June report from the China Macroeconomy Forum, a think tank with Renmin University of China.
“If it is not handled properly, it will cause other social problems beyond the economy, and it could even ignite the fuse of political problems,” the report said.
China’s youth unemployment rate has doubled in the last four years, a period of economic volatility induced by Beijing’s “zero Covid” measures that left companies wary of hiring.
In addition, government crackdowns and tighter supervision have subdued once-vibrant industries such as online education, technology and real estate — fields young people had flocked to for jobs.
Starting in 2020, Alibaba, one of China’s biggest technology companies, was a target of government scrutiny. Last year, the company reduced its employee head count by about 11,700, or about 5 percent of its work force, according to a report released by the Chinese Academy of Social Sciences, a body that works under China’s State Council.
And as more young people pursued higher education, there has been a mismatch in the jobs they want versus what is available. China’s economy has not created enough of the high-paying white-collar jobs that many college graduates are seeking, intensifying competition for the most appealing roles.
After economic growth slowed significantly in the second quarter, Beijing released a 31-point package of policy initiatives and support measures in July encouraging private companies to add jobs.
In a May report about China’s youth unemployment, Goldman Sachs said young people were especially vulnerable to losing their jobs or not getting hired in economic downturns because they have less work experience.
In June, China’s Ministry of Education told schools and local officials to help graduates find jobs “with a sense of duty and urgency,” citing the concern of the Communist Party and the government’s top leaders.
The ministry also told Communist Party officials and school administrators that they should visit companies to seek out job openings for students in majors with low employment rates. In Hunan Province, the education department recently issued a notice that requires schools to submit an explanation if more than 20 percent of graduates find part-time or freelance work instead of a full-time job. Sichuan Province said its colleges would consider canceling majors with a low employment rate for two straight years.
Increasingly, the message being handed down to young people is that they should not be too selective in picking a job and that enduring tough times builds character. Xi Jinping, the country’s top leader, said young people should strive to work in difficult and remote areas and learn to “eat bitterness,” a Chinese expression that means to endure hardship. But even becoming an entry-level civil servant is more challenging these days, with vastly more people taking the entrance examination than jobs available.
College administrators are feeling the pressure to fulfill the employment mandates from government.
“The superiors press the schools, and the schools just press the staff,” said Emma Zhu, a career counselor at a college in Zhejiang Province.
Stella Xu, who works as a career counselor at a college in Hubei Province, said her boss handed out rankings of each counselors’ employment rates and asked them to provide updates on job placements at every monthly meeting.
“You place an invisible pressure on yourself,” said Ms. Xu, who said she had a “pretty good” employment rate after advising more than 250 graduates this year. “It would look bad if you’re too far behind others.”
Ms. Xu said that when she visited companies, she tried to persuade employers to take more graduates than they were seeking. She said she prodded her students to secure job offers quickly and told them that they must turn in job offer agreements to the school by graduation day.
“I’m just very uneasy every day about why some students haven’t been employed,” she said.
As the pressure campaign on colleges intensifies, students and administrators are turning to extreme measures.
For $17 on Taobao, a Chinese e-commerce site, a vendor is selling fabricated employment offers from a manufacturing firm affixed with a company seal and registration number. Along with providing the document, the vendor will also respond to confirmation calls from the school or a local education department.
Jessamine Wang, 23, who majored in financial management at a university in Chengdu, in southwestern China, decided to take the civil service exam after applying unsuccessfully for more than 100 jobs. Her career counselor urged her to turn in a fake job offer from a company anyway, and threatened to undermine her government job prospects if she didn’t. Ms. Wang said she refused.
Lucia Xu, 22, gave her career counselor a fake job offer with a construction company where a family friend worked. She is planning to take graduate school exams this winter and won’t be looking for a job while she studies for the tests.
“If you don’t sign one, they will hassle you more and more frequently. The closer it gets to graduation, the harder they press,” Ms. Xu said.
Business
Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case
In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.
The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.
The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.
Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.
Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”
Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.
Ms. Flynn said context mattered.
“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”
Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.
The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.
He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.
When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.
After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.
He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.
Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.
Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.
Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.
“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”
Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.
“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”
Business
SEC probes B. Riley loan to founder, deals with franchise group
B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.
The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.
B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.
The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.
Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.
B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.
Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”
FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.
One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.
Griffin writes for Bloomberg.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
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